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Goodwill and Other Intangible Assets
3 Months Ended
Mar. 31, 2013
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets
GOODWILL AND OTHER INTANGIBLE ASSETS

The Company has recorded goodwill as a result of its business combinations. Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible assets, other intangible assets acquired and liabilities assumed, including noncontrolling interests. Changes in goodwill from December 31, 2012 to March 31, 2013 are related to fluctuations in foreign currency exchange rates.

The Company has also recorded other finite and indefinite lived intangible assets as a result of business combinations completed prior to 2013. Changes in gross carrying amount from December 31, 2012 to March 31, 2013 are related to fluctuations in foreign currency exchange rates. The Company's intangible assets include facility management contracts, non-compete agreements and the trade name and technology of B.I. Incorporated, which the Company refers to as BI, as follows (in thousands):
 
 
 
March 31, 2013
 
December 31, 2012
 
Weighted Average Useful Life (years)
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Facility management contracts
13.4
 
$
151,779

 
$
(36,020
)
 
$
115,759

 
$
151,913

 
$
(33,141
)
 
$
118,772

Covenants not to compete
2.0
 
8,570

 
(8,570
)
 

 
8,570

 
(8,495
)
 
75

Technology
7.0
 
21,200

 
(6,486
)
 
14,714

 
21,200

 
(5,729
)
 
15,471

Trade name (Indefinite lived)
Indefinite
 
44,000

 

 
44,000

 
44,000

 

 
44,000

Total acquired intangible assets
 
 
$
225,549

 
$
(51,076
)
 
$
174,473

 
$
225,683

 
$
(47,365
)
 
$
178,318



The accounting for recognized intangible assets is based on the useful lives to the reporting entity. Intangible assets with finite useful lives are amortized over their useful lives and intangible assets with indefinite useful lives are not amortized. The Company estimates the useful lives of its intangible assets taking into consideration (i) the expected use of the asset by the Company, (ii) the expected useful lives of other related assets or groups of assets, (iii) legal or contractual limitations, (iv) the Company's historical experience in renewing or extending similar arrangements, (v) the effects of obsolescence, demand, competition and other economic factors and (vi) the level of maintenance expenditures required to obtain the expected cash flows from the asset.
Amortization expense was $3.7 million and $4.6 million for the three months ended March 31, 2013 and April 1, 2012, respectively, and primarily related to the U.S. Corrections & Detention and GEO Community Services segments' amortization of intangible assets for acquired management contracts. The Company relies on its historical experience in determining the useful life of facility management contracts. The Company makes assumptions related to acquired facility management contracts based on the competitive environment for individual contracts, our historical success rates in retaining contracts, the supply of available beds in the market, changes in legislation, the projected profitability of the facilities and other market conditions. As of March 31, 2013, the weighted average period before the next contract renewal or extension for the facility management contracts was approximately 1.3 years. Although the facility management contracts acquired have renewal and extension terms in the near term, the Company has historically maintained these relationships beyond the contractual periods.
Estimated amortization expense related to the Company's finite-lived intangible assets for the remainder of fiscal year 2013 through fiscal year 2017 and thereafter is as follows (in thousands):
Fiscal Year
 
 
Total Amortization Expense
Remainder of 2013
 
$
10,904

2014
 
14,538

2015
 
14,538

2016
 
14,538

2017
 
14,538

Thereafter
 
61,417

 
 
$
130,473